PART ONE 2019 - SURVEY RESULTS - Freeman Media

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PART ONE 2019 - SURVEY RESULTS - Freeman Media
SURVEY REPORT 2017

                         PA R T O N E – 2 0 1 9 – S U R V E Y R E S U LT S

  ENERGY NEWS
  www.energynews.co.nz
PART ONE 2019 - SURVEY RESULTS - Freeman Media
—
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PART ONE 2019 - SURVEY RESULTS - Freeman Media
PART 1 - 2019

Highlights
Results from Part One of the 2019 Energy News and ABB Electricity Survey are now in. We had more than 200 respondents complete the
six-question survey, providing an insight into the sector’s thoughts on decarbonising New Zealand’s electricity sector.

Thanks to our industry advisory panel, who are helping to develop the surveys this year. Part Two is due to go live in June.

In response to Part One of our survey, the sector thought:

                                   Industry needs                                                         EVs are here to
                                   to go electric                                                         stay
       Displacing non-renewable energy                                         Growth of electric vehicle
       through electrification of transport                                    registrations will likely follow the
       and process heat is the best way NZ                                     S-curve trend post-2021
       can exploit its renewable advantage

                                                                                                           Hydrogen
                                                                                                           remains
                                   Prices will spike                                                       questionable
       Expect greater price volatility and                                     The economics don’t stack up at the
       security risk once Genesis says                                         moment, but that might change
       good-bye to burning coal

ENERGY NEWS                                                                                                                               3
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PART ONE 2019 - SURVEY RESULTS - Freeman Media
PART 1 - 2019

Decarbonisation
Timeline for change

Question 1
For the fourth year running we want you to gaze into the crystal ball yet again and tell us when you think this country will hit the following
milestones. How have your views changed over time?

                     100 MW of solar in NZ

             Single solar asset over 5 MW                                                                                                 2019

       New generation asset over 50 MW                                                                                                    2018

                                                                                                                                          2017
                   20,000* electric vehicles

                                                                                                                                          2016
    All networks with utility scale batteries

              Next network amalgamation

                                       50 retailers

                                                    2018   2020           2022              2024          2030             Never

                                                                                   Date

             Milestone                                                   2020         2022         2024          2030        NEVER
             100 MW of solar installed?
                                                                         58%          26%           8%           6%           2%
             (90 MW as of 31 Jan 2019)

             A single solar project over 5 MW?
                                                                          6%          29%           31%          27%          7%
             (Yealands is the largest at 0.5 MW)

             A new generation asset over 50 MW?                          18%          26%          28%           21%          7%

             20,000 electric vehicles?
                                                                         31%          49%          14%           5%           1%
             (12,197 as of 31 Jan 2019)

             All networks with utility-scale batteries?
                                                                          1%           6%          24%           47%          22%
             (3 in 2018)

             Next lines company amalgamation?                            12%          28%          30%           15%          15%

             50 retail brands?
                                                                          6%          25%          25%           9%           35%
             (40 as of 31 Jan 2019)

* We increased the number of retailers to 50 in 2018, from 40 in 2016 and 2017.
* This year we increased the number of EVs to 20,000 from 10,000 in previous years.

ENERGY NEWS                                                                                                                                        4
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PART 1 - 2019

Decarbonisation
Question 2
This country has a strong renewable electricity standing when compared globally. What is the best way to exploit this renewable
advantage? Choose one option you most agree with:

                                          Making and                An HVDC link between NZ
                                          exporting hydrogen        and Australia

                         More low emissions
                         industrial exports
                                                                  5%    3%

                                                       12%

                                                                                                                       By displacing non-
                                                                                                                       renewables
                                                 16%
                    Knowledge and
                    experience                                                                  64%

                               By displacing non-renewable energy through electrification of transport and process
                               heat – 64%

                               Knowledge and experience - such as New Zealand-based companies working offshore to
                               help develop renewable projects – 16%

                               By making more low emissions industrial exports like aluminium – 12%

                               By making hydrogen and exporting it to markets that have the infrastructure to use it – 5%

                               Linking New Zealand and Australia’s electricity markets via an HVDC link – 3%

ENERGY NEWS                                                                                                                                  5
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PART 1 - 2019

     Decarbonisation
     Question 3
     Genesis has indicated it will halt the use of coal for power generation by 2030. Which of the following do you think will most likely happen after
     this? Choose one option:

                                                                                 Consumers will opt for their own
                                                      Tiwai will close so
                                                                                 energy storage methods
                                                      it doesn’t matter
69
48
44                                     Genesis will not
30                                     stop using coal
25
                                                                                1%
 8
 2                                                                            4%
                                                                                                                          Greater price volatility
                                                                  11%                                                     and security risk

                                                                                                       31%
                      More focus
                      on other deep
                      energy storage
                      optimisation                        13%

                                                                19%
                                                                                              21%

                                 More renewables will
                                 be built
                                                                                                               Genesis will use more
                                                                                                               gas

                                     There will be greater price volatility and security risk if renewables do not have a
                                     thermal back up – 31%

                                     Genesis will replace its coal use with gas – 21%

                                     More renewable generation will be built to cover the shortfall – 19%

                                     There will be a bigger focus on optimising the performance of other deep energy
                                     storage options – 13%

                                     Genesis will not stop using coal by then – 11%

                                     The Tiwai aluminium smelter will cease operation around the same time so it won’t be a
                                     problem – 4%

                                     Wealthy consumers might become less confident in centralised security of supply and
                                     opt to use their own storage methods, such as diesel generation or batteries – 1%

     ENERGY NEWS                                                                                                                                      6
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PART 1 - 2019

Decarbonisation
Question 4
We are moving ever closer to the deadline year for the national target of 64,000 electric vehicles on New Zealand roads by 2021. As of
January 2019 there were more than 12,000 registered. How do you see EV registrations tracking post-2021? Choose one option:

                                               TAAS and other alternative fuels
                                               will become more popular

                       Exponentially

                                                                7%

                                                    11%                                                         Growth will likely follow
                                                                                                                the S-curve trend

                                                                                            38%

                                           18%
      Growth will slow post
      mid-2020

                                                                  26%

                                                          Growth will continue
                                                          regardless of any changes

                              Growth will likely follow the S-curve trend – 38%

                              All major producers are pursuing electric drive trains and abandoning ICE - it doesn’t really
                              matter, the genie is out of the bottle – 26%

                              Growth will slow once the road user charge exemption for EVs expires in June 2020 – 18%

                              Exponentially – 11%

                              EV registrations will be overtaken by the growth of transport-as-a-service offerings or other
                              alternative fuels – 7%

ENERGY NEWS                                                                                                                                   7
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PART 1 - 2019

Decarbonisation
Question 5
On the subject of electrifying transport - for each of the different transport modes, choose what percentage of the fleet you think will be electric
by 2035:

                  Light vehicles

              Bicycles/scooters

                   Ferries/ships

                               Trains

                            Trucks

                                    0%    10%           20%          40%           50%          70%         More

                                                                    EV fleet percentage

                   Milestone              0%          10%          20%          40%          50%          70%          More
                   Light vehicles
                                          1%           8%          25%          24%          20%          17%           5%

                   Bicycles/scooters      1%           7%          16%          17%          30%          21%           8%

                   Ferries/ships          28%         41%          22%           3%           4%           1%           1%

                   Trains                 4%          14%          17%          19%          13%          20%          13%

                   Trucks                 11%         26%          31%          16%           8%           7%           1%

ENERGY NEWS                                                                                                                                       8
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PART 1 - 2019

Decarbonisation
Question 6
The Government has strong aspirations to create a hydrogen industry in this country to help it meet its net zero carbon goals. What are your
thoughts on this stance? Choose one option you most agree with:

                                                 It will only work as a
                                                 transport fuel

                 They’re going down
                 the right path

                                                                 6%
                                                                                                              It’s early days but
                                                     12%                                                      good to get started

                                                                                            39%

                                           15%
            This is an
            impossible task

                                                                 28%

                                                  We cannot meet
                                                  decarbonisation goals
                                                  with hydrogen

                              I don’t think the economics stack up yet, but it is good to get this ground work in
                              place – 39%

                              Decarbonisation goals cannot be met by hydrogen and there are more economic ways to
                              achieve a better outcome through electrification – 28%

                              No country in the world has cracked this - what makes us think we can? We have been
                              down this path before. It didn’t work then, it won’t work now – 15%

                              They’re going down the right path - this is a good way for us to lower emissions in the
                              heavy transport fleet and in some power generation – 12%

                              I see it only being successful as a transport fuel – 6%

ENERGY NEWS                                                                                                                                    9
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PART
                                                                                                 QTR 1 - 2019
                                                                                                         2018

Further thoughts
Thanks to those who provided further thoughts on the survey’s theme. Here are some of your comments below:

“We have the technical ability and resources to decarbonise the electricity system
while maintaining security of supply. The question is whether we are open
minded enough and have the will to.”

“Cut gas too soon, this means coal will be used for a much longer than necessary
time.”

“Government-led programmes are bound to fail. This process will only reach its
goal with substantial technical break throughs and consumer demand.”

“Hydrogen is likely to be of the energy system, finding a niche (which might be
significant), but it will not meet all fossil fuel replacement needs. Of course it does
not compare to the incumbent systems because they were less expensive and
have benefited from a century of intense R&D and capital investment.”

“The new paradigms will take off as soon as all the baby boomers retire from the
power industry.”

“The whole of the electrical industry is in need of a clean up. There are too many
organisations contributing various ideas and achieving little.”

“The industry is losing sight of diversity and resilience.”

ENERGY NEWS                                                                                              10
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About ABB                                                                 About Energy News
ABB (ABBN: SIX Swiss Ex) is a pioneering technology leader in             Energy News is New Zealand’s online news and information service
electrification products, robotics and motion, industrial automation      for the energy sector. The website was launched in 2008 and now
and power grids, serving customers in utilities, industry and transport   boasts more than 5,000 readers every month from 300 subscribing
& infrastructure globally. Continuing a history of innovation spanning    organisations. Its readership consists of New Zealand energy sector
more than 130 years, ABB today is writing the future of industrial        organisations and service companies spanning the electricity, oil and
digitalisation with two clear value propositions: bringing electricity    gas, petroleum and alternative energy value chain.
from any power plant to any plug and automating industries from
                                                                          The subscription-based site provides daily news, executive interviews,
natural resources to finished products. As title partner of Formula E,
                                                                          opinion and commentary. It also hosts a suite of information resources
the fully electric international FIA motorsport class, ABB is pushing
                                                                          including two large databases of asset owners and energy resources.
the boundaries of e-mobility to contribute to a sustainable future. ABB
                                                                          Other information includes 30-minute electricity prices, supply and
operates in more than 100 countries with about 135,000 employees.
                                                                          demand monitoring, petroleum permit deadline summaries and an oil
www.abb.com
                                                                          price monitor.

* Cover image: Auckland Museum’s solar array

ENERGY NEWS                                                                                                                                    11
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